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Wetherspoon Prices Sale Of £93.7m Worth Of Shares At Top End Of Expected Range

Published on Jan 21 2021 2:21 PM in Pub/Bar/Nightclub tagged: Wetherspoon

Wetherspoon Prices Sale Of £93.7m Worth Of Shares At Top End Of Expected Range

British pub operator Wetherspoon priced a sale of £93.7 million worth of new shares at the top end of its expected range on Wednesday January 22, a signal of confidence from investors that pushed the pub operator's shares 3% higher.

The cheap beer specialist said that 8.4 million new shares have been placed at 1,120 pence per share - a discount of over 5% to Tuesday January 21's closing price, but the proceeds raised were at the top of the range that it had given when announcing the offer a day earlier.

"We like Wetherspoon's relentless consumer focus, employee engagement, largely freehold estate and history of evolution. This profile should allow JDW to fast return to its former profitability," Jefferies analysts said.

Following strict COVID-19 led curbs in December, England went into its third national lockdown earlier this month.

The pandemic-hit hospitality industry has laid off thousands of workers, with Wetherspoon cutting jobs at its head office and airport pubs.

The company said this week that it expects pubs to remain shut until March and that the fresh funds will provide enough liquidity to deal with very low sales after reopening.

It is also considering buying properties in central London, freehold reversions of pubs of where it is currently the tenant and properties close to successful pubs in an effort to cash in on declining property prices.

"It has a young customer base who have been less fearful of venturing out when restrictions do ease, which does bode well for recovery unless there is another twist in the trajectory of the virus," Hargreaves Lansdown analyst Susannah Streeter said.

Placing Expectation

Wetherspoon, which has seen no sales since shutting all of its pubs from December 31 and said it is burning through approximately £4.1 million per week in the latest lockdown, had expected the placing to raise between £92.1 million and £93.7 million.

Money Raised During Britain's First National Lockdown

Wetherspoon raised £141 million in April of last year during Britain's first national lockdown.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.

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